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Inequality,debt and taxation:the perverse relation between the productive and the non-productive assets of the economy

Author

Listed:
  • Mario Amendola

    (Università degli studi di Roma La Sapienza)

  • Jean Luc Gaffard

    (Ofce)

  • Fabricio Patriarca

    (Università degli studi di Roma La Sapienza)

Abstract

The explosion of the global financial crisis in 2008 and its transmission to the real economies have been interpreted as calling for new kinds of regulation of the banking and the financial systems that would have allowed reestablishing a virtuous relation between the real and the financial sectors of the economy. In this paper we maintain the different view that the financial crisis and the ensuing real crisis have roots in the strong increase in incomes inequality that has been taking place in the Western world in the last thirty years or so. This has created an all around aggregate demand deficiency crisis that has strongly reduced prospects and opportunities for investments in productive capacities and shifted resources toward other uses, thus feeding a perverse relation between the productive and the non‐productive assets of the economy. In this context the way out of the crisis is re‐establishing the right distributive conditions: which cannot be obtained by a policy aimed at relieving the weight of private debts but calls for a redistribution through taxes on the incomes of non‐productive sectors, according to a fine tuning that should prevent from excessive taxations transforming positive into negative effects.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Mario Amendola & Jean Luc Gaffard & Fabricio Patriarca, 2013. "Inequality,debt and taxation:the perverse relation between the productive and the non-productive assets of the economy," Documents de Travail de l'OFCE 2013-21, Observatoire Francais des Conjonctures Economiques (OFCE).
    • Handle: RePEc:fce:doctra:1321
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    References listed on IDEAS

    as
    1. Thomas Piketty & Emmanuel Saez, 2006. "The Evolution of Top Incomes: A Historical and International Perspective," American Economic Review, American Economic Association, vol. 96(2), pages 200-205, May.
    2. Frank Levy & Peter Temin, 2007. "Inequality and Institutions in 20th Century America," NBER Working Papers 13106, National Bureau of Economic Research, Inc.
    3. Amendola, Mario & Gaffard, Jean-Luc, 1998. "Out of Equilibrium," OUP Catalogue, Oxford University Press, number 9780198293804.
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    1. repec:hal:spmain:info:hdl:2441/4eus3ho3fk813p8qcqfc1gaft2 is not listed on IDEAS
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    3. Mario Amendola & Jean-Luc Gaffard, 2014. "Novelty, Hysteresis, and Growth," Working Papers hal-01027426, HAL.
    4. repec:hal:spmain:info:hdl:2441/2pguj421ms98or9o9plc5q0m62 is not listed on IDEAS
    5. repec:spo:wpmain:info:hdl:2441/4eus3ho3fk813p8qcqfc1gaft2 is not listed on IDEAS

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    More about this item

    Keywords

    Assets; debt; inequality; taxation;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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